Tuesday, November 3, 2009

Bakground of wages act

Background A tripartite Committee Viz.,"The Committee on Fair Wage" was set up in 1948 to provide guidelines for wage structures in the country. The report of this Committee was a major landmark in the history of formulation of wage policy in India. Its recommendations set out the key concepts of the `living wage', "minimum wages" and "fair wage" besides setting out guidelines for wage fixation. Article 39|- The State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women. Article 43 |- The State shall endeavour, by suitable legislation or economic organisation or in any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural opportunities. Enactment of the Minimum Wages Act Historical Backdrop * The initiative started with the resolution placed by one Shri K.G.R.Choudhary in 1920 for setting up Boards for determination of minimum wages in each industry. * The International Labour Conference adopted in 1928 Convention No.26 and Recommendation No. 30 relating to wage fixing machinery in trades or parts of trades. * On the recommendation of the Standing Labour Committee and Indian Labour Conference, a Labour Investigation Committee was appointed in 1943 to investigate into the question of wages and other matters like housing, social conditions and employment. * A draft bill was considered by the Indian Labour Conference in 1945. * The 8th meeting of the Standing Labour Committee recommended in 1946 to enact a separate legislation for the unorganised sector including working hours, minimum wages and paid holidays. * A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11.4.46 to provide for fixation of minimum wages in certain employments. It was passed in 1946 and came into force with effect from 15.3.48. Under the Act, Central and State Governments are appropriate Governments to (a) notify scheduled employment (b) fix/revise minimum wages The Act contains list of all these employments for which minimum wages are to be fixed by the appropriate Governments. There are two parts of the Schedule. Part I has non-agricultural employments whereas Part-II has employment in agriculture. Criteria for notification of scheduled employment The appropriate Government fixes the minimum wage in respect of only those scheduled employments where the number of employees is 1000 or more. Fixation/revision of minimum wages Norms The norms include those which were recommended by the Indian Labour Conference in its session held in 1957 at Nainital. (i) 3 consumption units for one earner. (ii) Minimum food requirements of 2700 calories per average Indian adult. (iii) Clothing requirements of 72 yards per annum per family. (iv) Rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme. (v) Fuel, lighting and other Miscellaneous items of expenditure to constitute 20% of the total Minimum Wages. Other parameters (i) "Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriage etc. should further constitute 25% of the total minimum wage." This judgment was delivered by the Supreme Court of India in 1991 in the case of Reptakos Brett and Co.Vs.its workmen. (ii) Local conditions and other factors influencing the wage rate. Methods for fixation/revision of minimum wages Fixation Section 3 empowers appropriate Government to fix the minimum rates of wages in the scheduled employments. Revision Revise the Minimum rates at an appropriate interval of not exceeding five years. Procedure for Fixation/Revision In Section 5 of the Minimum Wages Act,1948, two methods have been provided for fixation/revision of minimum wages. They are Committee method and Notification method. Committee Method Under this method, committees and sub-committees are set up by the appropriate Governments to hold enquiries and make recommendations with regard to fixation and revision of minimum wages, as the case may be. Notification method In this method, Government proposals are published in the Official Gazette for information of the persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals will be taken into consideration. After considering advice of the Committees/Sub-committees and all the representations received by the specified date in Notification method, the appropriate Government shall, by notification in the Official Gazette, fix/revise the minimum wage in respect of the concerned scheduled employment and it shall come into force on expiry of three months from the date of its issue. Variable Dearness Allowance (VDA) It was recommended in the Labour Ministers' Conference held in 1988, to evolve a mechanism to protect wages against inflation by linking it to rise in the Consumer Price Index. The Variable Dearness Allowance came into being in the year 1991. The allowance is revised twice a year, once on 1st April and then on 1st October. In the State Sphere, 22 States/Union Territories have provisions for Variable Dearness Allowance, at present. Enforcement Machinery The enforcement of the provisions of the Minimum Wages Act in the Central Sphere , is secured through the officers of Central Industrial Relations Machinery. In so far as State Sphere is concerned, the enforcement is the responsibility of the respective State Government/Union Territory. National Wage Policy Though it is desirable to have a National Wage Policy it is difficult to conceive a concept of the same. The National Wage Policy has been discussed on many occasions in different fora. Because fixation of wages depends on a number of criteria like local conditions, cost of living and paying capacity also varies from State to State and from industry to industry, it would be difficult to maintain uniformity in wages. The Indian Labour Conference, held in November, 1985 expressed the following views- “Till such time a national wage is feasible, it would be desirable to have regional minimum wages in regard to which the Central Government may lay down the guidelines. The Minimum Wages should be revised at regular periodicity and should be linked with rise in the cost of living” Accordingly, the Government issued guidelines in July, 87 for setting up of Regional Minimum Wages Advisory Committees. These Committees renamed subsequently as Regional Labour Ministers’ Conference, made a number of recommendations which include reduction in disparities in minimum wages in different states of a region, setting up of inter-state Coordination Council, consultation with neighbouring States while fixing/revising minimum wages etc.

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